Ottawa agrees to lend millions of dollars for a second “green hydrogen” project in the Atlantic provinces.
Export Development Canada and World Energy GH2 announced Wednesday the conclusion of an agreement for a $128 million credit facility to support the Nujio’qonik project, on the west coast of the island of Newfoundland.
Ottawa’s business loan, similar to a line of credit, comes about two months after a similar deal in Nova Scotia to provide $166 million to Everwind Fuels.
Both projects are attempting to claim the title of “Canada’s most advanced green hydrogen plant,” although neither has a commissioning date yet.
In August 2022, Canada signed an agreement with Germany for the production and export of “clean hydrogen” to Europe. But Canada currently has no operating “green hydrogen” plants.
World Energy’s Nujio’qonik GH2 project will include two to three wind farms in Stephenville and the surrounding area to initially produce approximately 250,000 tonnes of hydrogen per year.
Germany’s hydrogen strategy includes a plan to attempt to replace its coal-fired power plants with hydrogen over the next 15 to 20 years. Germany must obtain most of this hydrogen from abroad.
The Canada-Germany deal sets a bold goal to ship hydrogen as early as 2025, but World Energy CEO Sean Leet said Wednesday it’s highly unlikely his company can meet that timeline. .
He said World Energy is still working through various permitting and licensing processes in Newfoundland and he could not yet say when infrastructure would be built.
Federal Labor Minister Seamus O’Regan, who represents a riding in Newfoundland, said there was a race against time to become a global hydrogen supplier. “We need to get this project off the ground and signal to the world that we are players in green hydrogen,” he said.
Green hydrogen is generally considered the most environmentally friendly because it is produced by electrolysis to extract hydrogen from water using electricity from a renewable source. In most cases in Atlantic Canada, proposed projects involve the construction of new wind farms to power electrolysis.
Hydrogen can also be extracted with electricity generated by natural gas, but this energy source emits greenhouse gases. If these gases escape into the atmosphere, we speak of “gray hydrogen”; if they are trapped using carbon capture systems, it is called “blue hydrogen”.
Germany generally only wants to buy “green hydrogen”.